What You Need to Know About Shopping for Solar Panels
Photograph by Tim Pannell/Getty Images
Following a record-breaking year for rooftop solar panels in the U.S. in 2012, you can expect a flood of information overload on how to go about getting solar panels installed on your rooftop. Choosing the right solar panel service company has long required a considerable amount of detective work to figure out what you want and what you need.
As with any retail service, consumers should expect to deal in a straightforward manner with installers and get what they’re promised. Most consumers, though, have no previous experience shopping for solar, so it’s more difficult to spot shady language in a contract or missing steps in the purchase process. An online search of solar installers in your town could turn up a long list of companies.
To help you combat the mass of information, as well as any misinformation, we created this cheat sheet of things you should consider:
- The initial query. While you could start with a Google (GOOG) search for solar installers in your area, a better way is to contact your local utility or the city or state agency that oversees these utilities. They often have a list of installers who have already gotten the necessary certification to perform solar panel installations. California has such a statewide database. Nevada has one, too. So does New York.
- Learn about the incentives in your region. Incentives are going to be the key for you to figure out if you can afford solar panels. The best resource we’ve found for solar incentives by state is this great website, which is funded by the Department of Energy. You also could find out about rebates or tax breaks from your local utility or installers. Still, it’s a good idea to find an alternative source of information to verify what you’ve been told. The DOE-backed database not only lists incentives by states; it also includes a link to each state’s agency that administers the subsidies. From there you could also find whom to contact to ask about certified installers.
How to pay for it. An average-size system of solar panels, between 3KW and 5KW, costs $20,000-$25,000 in California, according to the current pricing posted by the state’s solar program website, which is filled with other good information. The pricing in your region may be different, so comparison shop. If you can afford to buy and own a system, you can reap the most savings over time.
If you can’t put that much money up front, you have many options to lease or get loans. You could sign up for leases in which you pay a monthly fee for solar electricity without owning the equipment. The company that provides the financing would own the system. A lease typically runs 15-20 years. Because of the growing popularity of the leases, you will likely hear about them from the installers you are interviewing. Check your local banks for loans. Admirals Bank, for example, recently launched a division that provides solar loans nationwide.
- Lease vs. power purchase agreement. Some installers offer leases, while others do power purchase agreements. In a lease, you would usually pay a fixed amount each month regardless of how much electricity the solar panels produce (though that monthly fee may go up at some point during the lifetime of the contract). In a power purchase agreement (PPA), you agree to an electric rate and pay for the amount of electricity produced. That means your payment will likely vary from month to month, and the electricity rate generally will go up over time. Sometimes installers can provide only one or the other because of local regulations governing electricity sales.
- Gear research. There is no shortage of solar panel makers, which have more or less standardized the designs and warranties of the equipment (here’s a video about how a solar panel generates electricity). There isn’t a consumer-friendly rating system to say which manufacturers produce better products than others. You can do your own online research, such as checking out which are among the top 10 solar panel makers in the world. But those make it onto the list because of the size of their factories. Many of those that aren’t on the top 10 also make quality products. The key is to ask your installers about how long a manufacturer has been in business, any complaints from other consumers, and the repair and return policy. It’s no different than shopping for electronic equipment or appliances.
The promise. As with any financing contract, you want to read it carefully and make sure you understand what you’ve been promised. Many installers promote the idea that if you go solar, you will end up paying less for electricity than you would otherwise. That’s an attractive proposition, especially if you have a high energy bill. But understand that those savings may not happen right away but over time.
No one can predict energy prices many years from now. Those prices depend heavily on the types of fuels used, changing regulations that might add to the cost of generation electricity, and market demand. If your utility can’t promise what your electricity rate will be in 10 years, how can anyone else promise that you will always pay a lower rate by going solar?
Keeping the system running. If you own the solar panels, you are responsible for their upkeep. The equipment usually doesn’t require a lot of cleaning, though you may not be in such luck if you live in a dusty area or your roof is a magnet for birds. Sometimes squirrels can develop a taste for electrical cables of the system.
Your solar panels are connected to an inverter, which converts the direct current from the solar panels to alternating current for use around the house. The inverter, therefore, can tell you if the power production dips lower than usual. You should regularly check on the inverter’s reading , and you should be able to do that on your computer or even your smartphone.
If you opt for a lease or power purchase agreement, the company that provides the financing is responsible for the equipment’s upkeep. The financing company may not be the installer that set up the solar panels on your roof, and it may end up hiring someone else to do any maintenance and repair work. You should understand who is in charge of servicing the equipment.
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